On July 21, 2020, the Huntington Town Board adopted significant amendments to the Town’s zoning and site plan regulations for mixed-use buildings in the Town’s C-6 (General Commercial) Districts. The amendments, set forth in a series of resolutions (click here Huntington Zoning Amendments), are aimed at controlling the scale of future mixed-use buildings, reducing their burden on public infrastructure, and protecting the suburban character of the Town’s hamlet centers.¹ Undoubtedly, preserving the positive aspects of suburban living is an admirable goal; however, some opponents of the legislation argue that it will impede revitalization within the Town, and efforts to meet growing housing needs.

The Town’s C-6 Districts are most concentrated in the hamlets of Huntington Village, Greenlawn, and East Northport, but they extend well beyond those areas. According to the Huntington GIS portal, properties zoned C-6 dominate the landscape along New York Avenue and on significant portions of Jericho Turnpike, Depot Road, and West Hills Road. Smaller pockets of C-6 properties exist throughout the Town north of Jericho Turnpike.

Regardless of where C-6 properties are located, they are all subject to new dimensional standards and parking requirements for mixed-use buildings. At the outset, all mixed-use buildings in C-6 Districts are now subject to site plan review, (§ 198-27[A][22]), and the following design standards:

  • The height of mixed-use buildings is capped at 38 feet, except in the Huntington Station Overlay District, where it remains 45 feet. (§ 198-27[G][3]).
  • The storage and community space on the ground floor is limited to 15% of the total floor area. (§ 198-27[A][22][c], [23][c]).
  • On-site parking spaces used to satisfy the requirement for commercial uses are not counted toward the on-site parking required for residential uses (i.e. no shared parking between commercial and residential uses on the same site).
  • The parking ratio for residential uses in mixed-use buildings is 1.5 spaces for every studio and one bedroom apartment, plus 0.5 spaces for each additional bedroom.
  • (§ 198-27[A][22], [A][23]).
  • Mixed-use buildings with new construction that will modify or expand the footprint of an existing building are subject to the added restriction that the combined area of the upper stories is capped at 150% of the area of the first floor of the building. (Note: Does not apply in the Huntington Station Overlay District). (§198-27[A][23][e]).

Under the pre-existing Zoning Code, mixed-use buildings in the C-6 District were already subject to restrictions prohibiting upper floors from having larger footprints than the ground floor, and the express requirement that they comply with the district’s height, area and bulk requirements. (§ 198-27[A][[22][a], [b]). The new amendments preserved these requirements and added to them.

Mixed-use projects on properties zoned C-6 and located within one of the Town’s hamlet centers and/or within the Town of Huntington Sewer District are subject to additional planning requirements relating to traffic and sewage disposal.

  • Applications for mixed-use buildings in Town hamlet centers must include a traffic impact study. If the project will impact the level of service at an intersection, the project sponsor will be required to provide mitigation measures to maintain or improve the level of service. (Town Code Ch. A202, § 5.2.3.2.7).
  • Applications for mixed-use buildings within the Huntington Sewer District must be submitted to the Town’s Department of Planning and Environment and Department of Environmental Waste Management for a joint review to confirm adequate sewer capacity before a site plan application will be entertained. (Town Code Ch. A202, § 5.2.2.2.3).

Finally, mixed-use buildings within the Huntington Village Hamlet Center, specifically, are subject to a third level of new standards and requirements.

  • Whenever a mixed-use building cannot comply with the Town’s drainage requirements, whether due to site constraints or for some other reason, the project sponsor is required to pay money equal to the estimated cost of the drainage improvements, as determined by the Town, into a dedicated Town fund for the construction of drainage improvements in the same watershed area. (Town Code Ch. A202, § 5.2.2.2.4.d).
  • Projects involving construction of new buildings, front facades, and exterior additions and alterations exceeding 1,000 square feet are subject to architectural review coordinated with the Town’s Historic Preservation Commission. (Town Code Ch. A202, § 5.2.2.2.7.3).
  • Municipal parking facilities the Town acquired on or after September 1, 2019 and located within the Huntington Village Hamlet Center cannot be used to satisfy the parking requirements for private properties. (§ 198-44[A]).

The sponsors of the zoning amendments, Supervisor Chad Lupinacci and Councilman Ed Smyth, lauded the passage of the legislation as a major step in protecting the unique character of the Town’s centers and curtailing undesirable development trends that evolved following prior amendments to the Town’s zoning code.² Some, however, are not on board with the new changes. Council members Joan Cergol and Mark Cuthbertson both voted down the amendments to the C-6 District. One commenter, Roger Weaving of the Huntington Township Housing Coalition, remarked that the legislation unnecessarily restricts developers’ ability to build housing–affordable housing, in particular–in the Town’s commercial centers where many lower paid individuals are compelled to seek work.³

Development projects do not happen overnight, and as a result, the impact of new zoning legislation is rarely felt immediately. Accordingly, it may be some time before the true impact of Huntington’s newest zoning amendments is known.

If you have any questions or comments on this post, please feel free to contact me.

1 https://www.huntingtonny.gov/news/?FeedID=4490 (Town of Huntington News Details 7/23/2020).

2 https://www.huntingtonny.gov/news/?FeedID=4490 (Town of Huntington News Details 7/23/2020).

3 Weaving, Roger, Op-Ed: A Sad Day for Huntington Housing, Huntington NOW, July 31, 2020 (https://huntingtonnow.com/op-ed-a-sad-day-for-huntington-housing/).

 

 

Last week, New York’s State Legislature passed a bill (A10001) seeking to amend NYS Environmental Conservation Law (“ECL”) §23-2703 in order to protect Long Island’s sole source aquifer.  The amendment would allow local governments in Nassau and Suffolk counties the ability to prohibit sand mining operations where it is determined that mining is “inconsistent with water quality protection and public health.”  Governor Andrew Cuomo must still sign the bill for it to become law.

Long Island, with more than 20 active sand mines, has historically been a battleground pitting environmentalists against construction advocates over the long-term impacts caused by excavating sand over of the community’s sole source aquifer.  Environmentalists have long warned about the peril of removing the sand filtering layers above the aquifer, which is also considered some of the best material for the manufacturing of concrete in the world.

Although the New York State Department of Environmental Conservation (“DEC”) has sole authority over issuing mining permits under the detailed legislative scheme of ECL (§23-2701 – §23-2727), the statue currently contains the following provision with respect to the preemption of local laws: “nothing in this title shall be construed to prevent any local government from enacting local zoning ordinances or other local laws which impose stricter mined land reclamation standards or requirements that those found herein.” ECL 23-2703[2]).  The Legislature has, in effect, provided for a State-wide standard for regulating mining, while at the same time recognizing the legitimate concerns and home rule of local municipalities.

In seeking to strike the appropriate balance between protecting Long Island’s drinking water supply and a necessary construction industry, this bill’s amendment again walks the fine line between “economically sound and stable mining industry” and “sound environmental management practices.”

Importantly, although this amendment states that local governments will have “concurrent authority” with the DEC, it cedes additional control to local municipalities to prohibit sand mining where it is found that there is contamination present or a determination that sand mining is inconsistent with water quality and public health.

The question remains how this bill with a clear nod to Long Island municipalities will allow sand mining to remain active on the island.

Town of Southampton GIS

Ronald A. Kaye, the property owner at 39 Actors Colony Road, Village of North Haven, sought to subdivide his 157, 241 square foot property into two residential lots. The subject property is located in the Residence R-1 Zoning District where the minimum lot size is 80,000 square feet. In October of 2016, he made an application to the Zoning Board of Appeals (“ZBA”) for a lot area variance to subdivide the property into two lots, one measuring 77,241 square feet and the other 80,000 square feet.

The Zoning Board by decision dated May 9, 2017, denied the application. See Village of North Haven Zoning Board of Appeals Decision No. 391A, Application of Ronald A. Kaye, dated May 9, 2017.  In its determination, the ZBA listed the neighboring properties in the Actors Colony Road neighborhood including the sizes of those properties, the majority of which were larger than 80,000 square feet. While the applicant claimed that the neighborhood included smaller nonconforming lots around Actors Colony Road, the ZBA felt otherwise stating, “applicant’s representatives sought over and again to enlarge the Actors Colony neighborhood in order to dilute or distort distinctly larger lot sizes dominating the neighborhood.” The ZBA further found, “to the naked eye the prevailing character of the Actors Colony Road neighborhood is a neighborhood of larger lots each improved with single family residences…to the naked eye the neighborhood of larger lots appears different from the encircling area of smaller non-conforming lots, none of which infiltrate into the larger lot neighborhood.”

Moreover, applicant’s argument that the relief requested was de minimis at 3.45% and therefore not substantial, failed to convince the ZBA. The ZBA stated, the relief sought as a percentage did not diminish the substantial detriment to the neighborhood if the relief were granted and then applied as a precedent…” In its decision, the ZBA listed every property in the Actors Colony neighborhood that could be affected by the determination as precedent, listing the number of lots that each property could yield, noting the “net impact of the foregoing would be an addition of 15 lots within the Actors Colony Road neighborhood.”

Kaye appealed to the Supreme Court, Suffolk County and by decision dated June 18, 2018, the Court upheld the ZBA’s denial.  Citing the extensive case law supporting the broad discretion afforded to local zoning boards in considering applications for variances and the limited nature of judicial review, the Court found the ZBA’s determination had a rational basis and was supported by substantial evidence in the record. The Court emphasized that the property owner’s hardship was self-created since he was aware of the zoning upon purchase and that granting the variance would have a “detrimental future impact on the unique nature of the Actors Colony Road neighborhood and result in an undesirable change to the character of that neighborhood.” The Supreme Court dismissed the Article 78 Proceeding.

Kaye appealed the Supreme Court’s determination to the Appellate Division, Second Department where the Court upheld the ZBA’s denial yet again. In the Matter of Ronald A. Kaye v. Zoning Board of the Village of North Haven, Index No. 2019-00851, dated July 15, 2020, the Court held that “contrary to petitioner’s contentions, the ZBA’s determination that the introduction of a substandard lot was detrimental to, and would cause an undesirable change in the character of the neighborhood which was characterized by oversized lots, had a rational basis and the ZBA was entitled to consider the effect its decision would have as precedent.” Ultimately, the Court upheld the Supreme Court’s determination to deny the petition and dismiss the proceeding.

In Cady v Town of Germantown Planning Bd., 2020 NY Slip Op 03440 [3d Dept 2020], the Appellate Division, Third Department, reversed the Columbia County Supreme Court’s judgment annulling site plan approval, and dismissed the Article 78 petition. Among other things, the Court’s decision addressed whether the Planning Board exceeded its authority and improperly interpreted the zoning code when it approved a 71-foot façade for a project within a scenic overlay district where the zoning code “suggested” a 50-foot limitation.

In January 2015, applicant Primax Properties, LLC (“Primax”) applied to the Town of Germantown (“Germantown”) Planning Board for subdivision and site plan approval to subdivide a 6.1-acre lot into two lots; the owners would retain a 4.7-acre lot, and other 1.4-acre lot would be conveyed to Primax for the construction of a 9,000 square-foot Dollar General store. The retail store is a permitted use requiring site plan approval, and the property is within Germantown’s scenic viewshed overlay district – designed to protect the Hudson River corridor and the Catskill Mountain viewshed in accordance with the comprehensive plan.

The Germantown Planning Board declared itself lead agency for review of Primax’s application under the State Environmental Quality Review Act (“SEQRA”) and issued a positive declaration. After various draft environmental impact statements (“EIS”) and public hearing and comment, Primax submitted a final EIS which the Germantown Planning Board accepted. The Germantown Planning Board also adopted a draft SEQRA findings statement. Part of the draft SEQRA findings statement indicated that, “although the proposed 71-foot-wide building and accompanying signage would be visible from surrounding locations, the building and signage were ‘not expected to present a significant visual impact on the viewshed.’”

Predominantly negative comments were submitted during public hearing and comment on the Germantown Planning Board’s draft SEQRA findings statement. Afterwards, the Germantown Planning Board adopted a resolution conditionally approving the site plan and subdivision. The resolution incorporated the SEQRA findings, and noted that the project complied with all standards for subdivision and site plan approval and the applicable zoning and design standards. Adjacent neighbors commenced a hybrid Article 78 proceeding and declaratory judgment action setting forth 12 causes of action to challenge the site plan approval, among other things.

The neighbors argued that the Germantown Planning Board exceeded its authority by approving a 71-foot façade without a referral or submission to the Germantown Zoning Board of Appeals (“ZBA”) for a determination as to whether an area variance is required. The Supreme Court agreed with the neighbors and annulled the Germantown Planning Board approval because it found the Germantown Planning Board exceeded its authority under the zoning code by failing to refer the issue of the 71-foot façade to the Germantown ZBA. Primax and the Germantown Planning Board appealed, and the Appellate Division reversed.

The Third Department found the lower court erred in concluding that the Germantown Planning Board exceeded its authority in declining to refer the project to the Germantown ZBA. Although local planning boards generally lack authority to interpret their respective zoning codes and this authority is generally reserved for zoning boards of appeals, “a planning board . . . will not be required to refer a matter to a zoning board for a superfluous interpretation of an unambiguous provision contained in the zoning code.”

Germantown’s zoning code, in pertinent part, states “the length of any façade should generally not exceed 50 feet maximum horizontal dimension.” Because this code provision is devoid of any compulsory language, it is deliberately phrased as a guideline – rather than a prohibition. Further, while the Germantown zoning code states the word “shall” is mandatory unless otherwise indicated and other provisions in the code use the word shall, the provision relating to the façade length does not include the word “shall.”

Accordingly, the Court held Germantown Planning Board did not exceed its authority because its approval of the site plan is rational and based simply upon an unambiguous reading of the code. The Court’s decision is a reminder that only zoning boards have the authority to interpret local zoning codes; however, if the zoning code is unambiguous, then planning board is free to act within the purview of its authority.

The Town of Smithtown is considering the adoption of a local law that would allow residential uses as part of mixed-use developments in the Hauppauge Industrial Park.[1]  The proposal follows on the heels of an April 2019 report commissioned by the Suffolk County Industrial Development Agency (“SCIDA”) which called for the park to position itself to become a regional economic hub that fosters the growth of key industries by, among other things, creating a more dynamic live-work-play environment that will attract and keep workers.

According to HIA-LI (formerly Hauppauge Industrial Association), the Hauppauge Industrial Park is the second largest industrial park in the nation, topped only by California’s Silicon Valley.  It is comprised of approximately 1,400 acres of land and is home to over 1,300 companies which employ about 55,000 people.  The 13 million square feet of construction, manufacturing and service industry space in the park generate approximately $13 billion in annual output or about 8% of Long Island’s gross domestic product.  While the Hauppauge Industrial Park plays an important role in Long Island’s economic development, many of its industrial occupants have closed their facilities in recent years.

The SCIDA report noted that while 39% of Long Island’s population over 25 years old have Bachelor’s degrees, many young adults do not work on Long Island.  Instead, college-educated millennials are attracted to more urban environments that offer walkable communities, with a variety of restaurants, bars and other social venues, and more diverse and affordable housing options.  Moreover, it is now widely recognized that employers go to places where employees want to live.  Thus, the report specifically calls for local zoning authorities to amend their zoning regulations to allow new mixed-use buildings in portions of the park fronting on major thoroughfares.

The Town of Smithtown has answered that call by proposing amendments to the Hauppauge Industrial Park Overlay District regulations that apply to the Light Industrial zoned properties in the Hauppauge Industrial Park.  The most significant amendment authorizes the Town Board to approve mixed-use buildings in certain areas of the park as a special exception if it finds that the proposed use is desirable and compatible with the surrounding area and the proposal satisfies certain minimum conditions.  For instance, in order to be eligible for a special exception, a proposed mixed-use building must be located on a lot that is at least seven acres in size that has frontage on Motor Parkway or on Old Willets Path south of Rabro Drive, or within 500 feet of certain designated intersections.  Approximately 13 parcels would be eligible for mixed-use development, which could result in the construction of as many as 1,000 apartments units within the industrial park.

Within a mixed-use building, a minimum of 50% of the ground floor must be occupied by active uses. An “active use” is defined in the proposed local law as “a use that generates daily public patronage, including . . . bars, commercial entertainment, restaurants, museums, retail (sales and service), personal service, offices, and similar uses, and a use which provides an amenity for building residents.”  Mixed-use developments must provide off-street parking that meets the parking requirements of the sum of the parking stalls required for each use within the building.  Lastly, at least 20% of the residential units shall be affordable workforce housing units and comply with the Town’s Affordable Workforce Housing Policy.

The Town Board held a virtual public hearing on May 21, 2020 to consider the proposed zoning amendments, and was sharply criticized by opponents of the law who argued that scheduling a public hearing on such an important proposal at 2 p.m. was “offensive” and that the virtual Zoom format lacked transparency.  Opponents of the law included residents of Hauppauge and the surrounding areas, and the president of the Hauppauge Board of Education, who claimed that mixed-use buildings would bring congestion and increase demands on public services like fire, police and schools.  Not surprisingly, the Town Board heard from a number of local developers and builder’s organizations who expressed support for the legislative proposal and see it as a catalyst for attracting new companies and industries to the park.

The public hearing was closed on May 21st, but the record was held open for 20 days for additional comment.  The Town Board formally closed the record on June 11th, and is expected to act on the proposed zoning amendments as soon as it completes its review under the State Environmental Quality Review Act (SEQRA).

[1] The Hauppauge Industrial Park is in the process of being rebranded as “The Long Island Innovation Park at Hauppauge.”

In a recent decision, Matter of Red Wing Properties, Inc. v. Town of Rhinebeck, et al., the Second Department held that a landowner’s intent to continue using its property for mining operations established a valid pre-existing nonconforming use.

Red Wing Properties, Inc. (“Petitioner”) owns roughly 241 acres of property located with the Town of Rhinebeck (the “Town”).  For several years, Petitioner used its property for sand and gravel mining.  However, at the time of this lawsuit, the majority of the property remained unmined.

A 2005 permit issued by the New York State Department of Environmental Conservation (“DEC”) allowed Petitioner to mine only 37.5 acres of its property.  In 2008, Petitioner sought to increase that allowance to 141 acres.  The DEC required that Petitioner conduct a number of studies to determine the impact of the proposed mining on the surrounding environment.  In particular, the DEC was concerned about an endangered turtle species in the area, and required a study with respect to that.  That study alone took six years and cost Petitioner over $125,000.  In 2010, due to the various environmental concerns and Petitioner’s desire to expedite the process, Petitioner reduced its proposed mining area to 124 acres.  In 2015, it further reduced its proposal to 94 acres.

Shortly after Petitioner’s latest reduced proposal, and while its “application to the DEC was still pending, the Town enacted a new zoning law that allowed mining on only those lands in the Town upon which there were existing, DEC-permitted mining operations.”  Thereafter, Petitioner sought a determination from the Town that it had a vested right to mine all of its property as a prior nonconforming use.  The Town’s Zoning Enforcement Officer (the “ZEO”) denied Petitioner’s application for such determination, and the Town’s Zoning Board of Appeals (the “ZBA”) confirmed the ZEO’s decision.

Petitioner then brought a hybrid proceeding under Article 78 of the CPLR seeking reversal of the ZBA’s determination, and a declaration that it had a vested right to mine the entirety of its property as a prior nonconforming use.  The Supreme Court dismissed that proceeding and Petitioner appealed.

The Second Department effectively reversed.  A nonconforming use is a use that is “‘in existence when a zoning ordinance is enacted, [and is], as a general rule, constitutionally protected and will be permitted to continue, notwithstanding the contrary provisions of the ordinance’ (Glacial Aggregates LLC v Town of Yorkshire, 14 NY3d 127, 135 quoting People v Miller, 304 NY 105, 107).”  Often, property owners whose land is permitted for mining or other quarrying will not excavate the entirety of the land at once, but will rather excavate one area at a time, leaving the remaining resources in the land until they become needed.  Where an property owner does this “‘over a long period of time and . . . clearly manifest[s] an intent to appropriate the entire parcel [for] quarrying, the extent of [the] protection afforded by the nonconforming use will extend to the boundaries of the parcel even though extensive excavation may have been limited to only a portion of the property’ (Matter of Syracuse Aggregate Corp. v Weise, 51 NY2d [278,] 286).”

The Second Department held that Petitioner manifested an intent to mine more of its property as early as 2008, when it submitted its initial application to the DEC.  In the years thereafter, it amended its application to ultimately reduce the proposed mining area to 94 acres.  Based on that most recent amendment, made prior to the enactment of the new law, the Second Department found that Petitioner had a vested right to mine up to 94 acres of its property, protected as a prior nonconforming use.  Petitioner was entitled to a declaration to that effect, and the Supreme Court should have annulled the determinations of the ZBA and ZEO that found otherwise.

How and when to challenge multiple municipal actions regarding a single project often perplexes Article 78 litigants. Varying statutes of limitations may apply to actions taken at various stages for one project, and the judicial concepts of finality and ripeness affect the viability of a challenge. For example, a litigant must challenge a lead agency’s determination pursuant to the State Environmental Quality Review Act (“SEQRA”) within four-months, but must challenge a zoning board’s decision within 30 days. Moreover, a planning may issue a negative declaration under SEQRA early in the process, but the project’s other approvals (e.g. area variances, site plan approval) may not be issued until later.

Last week, the Supreme Court, Ontario County, issued an illustrative decision in Concerned Citizen of Farmington v Town of Farmington, 2020 NY Slip Op 50690(U) [Sup Ct Ontario Co, Jun 16, 2020], which granted the respondents-defendants’ motion to dismiss the petitioners-plaintiffs’ challenge to a negative declaration issued pursuant to the SEQRA for lack of finality and ripeness where the planning board (as lead agency) issued a SEQRA negative declaration, but the planning board had not approved the subdivision plat, special permit or final site plan.

In 2018, Delaware River Solar LLC (“DRS”) proposed to build a large-scale solar farm on 135 acres in the Town of Farmington (“Farmington”), which required, among other things, subdivision plat approval, a special use permit, and site plan approval. The project is considered a Type I action under SEQRA and required environmental review to determine whether it would have one or more significant environment impacts. If the SEQRA lead agency answers in the affirmative, then it issues a positive declaration of environmental significance – requiring preparation of an environmental impact statement; otherwise, it issues a negative declaration concluding environmental review. Additionally, DRS applied to the Farmington Zoning Board for area variances seeking relief from setback requirements.

On August 7, 2019, after numerous public hearings, the Farmington Planning Board (acting as lead agency) issued a negative declaration under SEQRA. The petitioners-plaintiffs (“Petitioners”) commenced a hybrid proceeding-action on September 6, 2019, challenging the issuance of the negative declaration and seeking a temporary restraining order and permanent injunction to prohibit DRS from starting construction at the work site. Petitioners argued that the Farmington Planning Board’s negative declaration violated SEQRA’s procedural and substantive mandates. DRS, Farmington and others (“Respondents”) moved to dismiss.

During the pendency of the motions, the Farmington Zoning Board denied DRS’s application for the area variances. DRS, accordingly, revised its site plan to avoid the need for area variances. Thereafter, the Farmington Planning Board conducted additional public hearings on DRS’s revised site plan and issued a second negative declaration on December 18, 2019. The Petitioners filed an amended petition-complaint to address the same, and the Respondents filed their motion to dismiss (at issue herein) for failure to state a claim and for lack of ripeness.

Respondents argued that the Farmington Planning Board did not yet approve the subdivision plat, the special permit or the final site plan; therefore, there is no final agency action subject to judicial review. The Petitioners argued that the negative declaration is a final agency action by the Farmington Planning Board which caused an actual, concrete injury to them that cannot be ameliorated by further administrative action; therefore, a judicial controversy ripe for review exists as to whether the Farmington Planning Board violated SEQRA. The Court agreed with Respondents and granted the motion to dismiss, without prejudice, for lack of finality and ripeness.

Whether agency action is ripe for review depends on several considerations. “[A] pragmatic evaluation must be made of whether the decision maker has arrived at a definitive position on the issue that inflicts an actual, concrete injury”; that is, “the action must impose an obligation, deny a right or fix some legal relationship as a consummation of the administrative process and consideration must be given to the completeness of the action.” Moreover, “the injury purportedly inflicted by the agency may not be prevented or significantly ameliorated by further administrative action or by steps available to the complaining party.” The Court noted the ripeness doctrine is “closely related” to the finality requirement.

The Petitioners’ contended that they suffered a concrete injury because the negative declaration allows the project to proceed without the benefit of an environmental impact statement, which would identify significant adverse impacts to the community and require mitigation therefor. Further, the Farmington Planning Board will not necessarily be required to revisit its negative declaration at any subsequent time throughout the approval process, so the decision is final. The Court disagreed, relying largely upon Eadie v Town Bd. of Town of N. Greenbush, 7 NY3d 306 [2006].

In Eadie, the Court of Appeals heard a challenge to rezoning and addressed whether the four-month statute of limitations for Article 78 claims began to run from (i) the earlier time when the Town Board completed the SEQRA process by releasing a generic environmental impact statement or (ii) the later time when the Town Board adopted the proposed rezoning. The Court of Appeals held that the statute of limitations ran from the adoption of the rezoning – not from the earlier completion of the SEQRA process – because the petitioners did not suffer a concrete injury until the Town Board approved the rezoning; the injury was merely contingent upon the rezone, which could have been defeated by a protest petition or a failed vote.

In this present case, the Court analogized the Petitioners’ position to the petitioners in Eadie. The Petitioners’ injury is only contingent because the Farmington Planning Board could decline to approve the subdivision plat, the special permit or the final site plan. In these circumstances, the project could not proceed and no injury would accrue to the Petitioners. Notably, the Court emphasized that the Farmington Planning Board’s grant of preliminary subdivision plat approval and its posting of a draft resolution granting the special use permit do not change this conclusion because these preliminary steps do not constitute approval: “[a]n agency’s position will not be considered final if it is tentative, provisional or contingent, subject to recall, revision or reconsideration.”

The Court held the Petitioners’ challenge was neither final nor ripe for review under Article 78 (Article 78 precludes challenges to non-final determinations), and dismissed without prejudice. The Court also dismissed Petitioners’ declaratory judgment action because this is an inappropriate vehicle to challenge an administrative determination as arbitrary and capricious, an abuse of discretion, contrary to law or irrational – which challenge is limited to Article 78.

For the last several years, municipal governments across Long Island, and beyond, have been taking action to control or outright ban short-term rentals in their communities. Inevitably, these efforts have met opposition from both entrepreneurial property owners and the home-sharing services that support them. Lawsuits challenging local regulation of short-term rentals have popped up across the country, and they often raise questions about whether such regulations–which have direct implications on a property owner’s “bundle of rights”–are constitutional. In the Fourth Department’s recent decision in Matter of Wallace v Town of Grand Island (CA 19-00925, decided June 12, 2020), the question before the Court was whether the specific regulations under review effected a regulatory taking of real property for which just compensation was owed. The Appellate Court answered “no.”

In Wallace, the petitioner-plaintiff (plaintiff) purchased a single-family home in the Town of Grand Island for the specific purpose of operating a short-term rental. A few years later, the Town amended its zoning regulations to prohibit short-term rentals in certain zoning districts, except where the property was also owner-occupied. The law contained a one-year amortization period, which an affected property owner could petition to extend up to three times.

After the new law took effect, the plaintiff sought an extension of the amortization period as well as a use variance allowing him to continue operating his short-term rental indefinitely. The defendant Town boards denied his applications. In response, the plaintiff sued seeking (among other things) a declaration that the regulations were void on the grounds that they resulted in an unconstitutional regulatory taking of his real property.

On appeal, the Fourth Department affirmed dismissal of the plaintiff’s claims, concluding that the short-term rental law did not effect a regulatory taking of the plaintiff’s property. Applying the test set forth in the seminal case of Penn Central Transportation Co. v New York City, 438 US 104 (1978), the Court found that the plaintiff failed to provide “dollars and cents proof” (i.e. financial evidence) that “the subject premises was not capable of producing a reasonable return on his investment or that it was not adaptable to other suitable private use.” (Memorandum and Order at p. 3). At best, the plaintiff established a “mere diminution” in property value, which is not sufficient to establish a regulatory taking (Id.). The Court observed that the plaintiff was not precluded from selling the property at a profit, or from renting it on a long-term basis. (Id.). Finally, the Court noted that, even if plaintiff successfully established a regulatory taking, the proper relief for his claim would have been a hearing on just compensation, not invalidation of the law. (Id.).

The Court’s decision in Wallace is another weight on the scale for local control over short-term rentals. However, the dispute over these uses still seems far from over. A copy of the Court’s Memorandum and Order is available by clicking the following link: Mtr of Wallace v Grand Island.

In the Matter of Giora Neeman v Town of Warwick, __AD3d__, 2020 NY Slip Op 03112, the Second Department recently declared that a development agreement entered into between the respondent/defendant Black Bear Family Campgrounds, Inc. (“BBFC”) and respondent/defendant, Town of Warwick, (“Town”) as part of a settlement of a separate civil proceeding, constituted illegal contract zoning, and was therefore, null and void.

This is a cautionary tale of how making a deal with a governing body in exchange for zoning amendments can run afoul of the legal principle “contract zoning” – an illegal practice in which local officials cross the legal line between a legitimate planning process and an improper ceding of the municipality’s authority to regulate land use.  As stated by the Court of Appeals “all legislation ‘by contract’ is invalid in the sense that a Legislature cannot bargain away or sell its powers.” Church v. Town of Islip, 8 N.Y.2d 254, 259, (1960).

Here, back in 1965, the Town of Warwick Planning Board (“Planning Board”) approved a site plan permitting 74 campsites on the BBFC property.  Over the years, without approvals or permits, BBFC expanded to 154 campsites.  In 2008, the Town issued numerous violations for BBFC’s illegal operations and zoning violations.  In connection with settling this separate civil proceeding initiated by the Town, BBFC entered into a “Development Agreement” in which, the Town Board agreed that it would amend the zoning code’s time limit to stay at the campground from 120 days to 210 days and would modify the bulk requirements for campgrounds prior to the approval of BBFC’s site plan applications and variances.

In finding the Development Agreement null and void, the Court explained that “no municipal government has the power to make contracts that controls or limit it in the exercise of its legislative powers and duties”.  The Court went on to state that the test is whether the Development Agreement committed the Town to a specific course of action with respect to a zoning amendment.  Noting that the Town Board agreed to amend the zoning code to permit a 210-day occupancy limit, in exchange for BBFC’s agreement that such limit would apply to all campsites, the Court found that it was a contractual agreement between BBFC and the Town with consideration exchanged for legislative action that limited the Town Board’s authority to amend the zoning code until such time as BBFC would not be negatively affect by such a change.

Although not the subject of this blog, the Court also went on to find that the Planning Board adoption of its negative declaration was arbitrary and capricious.

Take away: Practitioners for property owners and municipal boards must carefully navigate negotiations between developers and local officials to avoid illegal contract zoning, which improperly cedes municipal authority to regulate land use.

 

The Lattingtown Harbor Property Owners’ Association, Inc., (“POA”) entered into a license agreement, dated November 29, 2017, with another member, Peter Tully, granting an exclusive right to affix private docks to the POA’s community dock in exchange for a license fee and services provided to the POA by Tully’s construction company. Another member of the POA, Peter Beckerman, brought an Article 78 Proceeding against the POA to annul the license agreement, alleging that the POA acted outside of the scope of its authority.

The Supreme Court, Nassau County, in Beckerman v. Lattingtown Harbor Property Owner’s Association Inc. et al. decided by Roy S. Mahon, J., Index No. 586-2018, dated November 7, 2018., granted the Article 78 Petition annulling the license agreement which granted Tully exclusive rights to use the POA’s community dock. Petitioner argued that the community dock constitutes community property and any agreement by the POA granting exclusive use of common area property exceeded the power and authority of the POA Board in violation of the By-laws and Declaration governing same. Respondent Tully intervened in the proceeding and alleged that he had private dock rights consisting of a floating dock attached to the community dock for approximately 16 years and in exchange for his dock rights his construction company provided services to the POA by maintaining the land, structures and waterways of the POA for that time period.

Respondents sought dismissal of the proceeding, in part, by alleging that the POA’s actions were protected by the business judgment rule. Both reviewing courts set forth the business judgment rule standard of review stating,

“In reviewing the actions of a homeowners’ association, a court should apply the business judgment rule and should limit its inquiry to whether the action was authorized and whether it was taken in good faith and in furtherance of the legitimate interests of the association” (19 Pond, Inc. v Goldens Bridge Community Assn., Inc., 142 AD3d 969, 970). In the case of a homeowners’ association, a court should defer to the homeowners’ association’s board’s actions “‘so long as the board acts for the purposes of the [homeowners’ association], within the scope of its authority and in good faith’” (Matter of Cohan v Board of Directors of 700 Shore Rd. Waters Edge, Inc., 108 AD3d 697, 699, quoting 40 W. 67th St. v Pullman, 100 NY2d 147, 153). However, “[t]he business judgment rule does not apply when a cooperative board acts outside the scope of its authority or violates its own governing documents” (Matter of Cohan v Board of Directors of 700 Shore Rd. Waters Edge, Inc., 108 AD3d at 699). See Matter of Beckerman v. Lattingtown Harbor Property Owner’s Association, Inc. et al. Appellate Division, Second Department, 2019-00279, dated May 20, 2020, page 2.

After reviewing the governing documents of the POA including the By-laws and Declaration, the Supreme Court found that the POA’s members had the “unfettered right to use the entire community dock as community property.” Therefore, the Court found that the Board’s agreements to allow Tully an exclusive use of a portion of the community dock was not only unauthorized, but in fact “specifically barred by the governing documents.” The Court held that community property could not be excluded from the members’ use.   Additionally, the Court stated, “furthermore, two of the five members on the Board when Tully’s license agreement was entered were the Tullys themselves, calling the Board’s good faith into serious question.” Moreover, the Court found that Tully’s contributions in exchange for his dock privileges failed to negate the inconsistency with the governing documents of the POA. Thus, the Supreme Court annulled the license agreement. Tully appealed.

The Appellate Division Second Department in Matter of Peter Beckerman v. Lattingtown Harbor Property Owners Association Inc. et al., 2019-00279, dated May 20, 2020, affirmed the Supreme Court’s determination annulling the license agreement. Citing the business judgment rule as the standard of review (set forth above), the Court held that entering into a license agreement was outside of the POA Board’s authority because the POA’s Declaration states that each member of the POA “is privileged to use the POA’s community recreational facilities in common with other members, and that the modification or cancellation of that privilege is not permitted.” The Court further stated, “[b]y granting Tully the exclusive right to affix his private docks to the POA’s community dock, the Board prevented other members from docking their boats at the portion of the POA’s community dock to which Tully’s private docks are affixed.” Accordingly, the Court affirmed the Supreme Court’s determination annulling the license agreement.